Thailand’s rice subsidy program may affect Vietnam: rice operators
Thailand’s rice subsidy program may affect Vietnam: rice operators
Thailand has passed a plan to allocate its budget of 21.5 billion baht to help stabilize rice prices for Thai farmers. This subsidy program may affect rice exporters including Vietnam, according to local rice operators.
The Thai Cabinet has agreed to extract 34.8 billion baht from the country’s budget for agricultural subsidy programs for rice and oil palm farmers, reported the Vietnam News Agency in Bangkok, Thailand.
In particular, over 890,000 households that had registered their rice farming activities with the Thai Ministry of Agricultural and Cooperatives will be the beneficiaries of the rice subsidy program.
The one-year program, which will take effect next month, will offer advantageous prices for rice farmers amid downward price volatility.
According to the director of a rice exporting firm in the Mekong Delta, rice exporters may suffer negative effects due to Thailand’s rice paddy pledging program, since the subsidy may result in high inventories of rice.
The director cited a rice subsidy program introduced by Thai Former Prime Minister Yingluck Shinawatra in 2011, noting that Thailand had stockpiled the rice to a record high, exceeding 11 million tons. Then, it decided to boost rice sales on the global market, affecting major rice exporters such as Vietnam.
Meanwhile, Pham Quang Dieu, director of market research firm Agromonitor, told the Saigon Times that the rice subsidy program will have a minor impact on Vietnam’s rice exports, as Thai rice export prices are higher than those of Vietnam, which means that Thailand does not compete with Vietnam in terms of rice prices.
In addition, Vietnamese OM 5451 high-quality rice and Dai Thom 8 rice have a pricing advantage over the same types of Thai rice. Further, these two types of Vietnamese rice are preferred in the global market. Thus, Dieu confirmed that the local rice sector would not be greatly affected by the Thai subsidy.
